Union leaders fear thousands more jobs could be at risk after Jaguar Land Rover confirmed it was axing 1,000 agency workers at its Solihull plant near Birmingham.

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JLR makes Jaguars, Land Rovers and Range Rovers at its Solihull plant, where 1,000 agency staff are being axed

Another 360 workers are being transferred to Solihull from the Jaguar factory at Castle Bromwich, the company has said.

The moves do not affect JLR's engine factory to the north of Wolverhampton, where more than 1,600 people work.

It comes after JLR put the brakes on car production earlier this year, slowing the production line at Castle Bromwich and temporarily cutting the number of shifts working at Halewood, on Merseyside, from three to two.

JLR has blamed "continuing headwinds impacting the car industry" – the slowdown in demand in Europe in the wake of the Brexit decision and the slump in sales of diesels following the VW scandal, tax hikes and tighter regulations.

Bosses at Unite, the UK's biggest union, now fear a heavy impact on Jaguar Land Rover's supply chain companies across the UK – many of them in the Black Country, Staffordshire and the wider West Midlands.

Aluminium bodied Range Rovers in production at the Jaguar Land Rover plant Solihull

Unite's national officer for Jaguar Land Rover, Des Quinn, said: “This announcement is a blow for a top class workforce that has worked hard to turn Jaguar Land Rover’s fortunes around in recent years.

“It should be a wake-up call for minsters and have alarm bells ringing in the highest levels of government.

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“Confusion over diesel cars prompted by badly thought through ministerial announcements, plus faltering consumer confidence allied with Brexit uncertainty are the major factors behind this announcement."

He added: “In the coming days Unite will be working closely with the company in our fight to retain jobs while giving our members the maximum support possible through this difficult time. Going forward Unite will continue to press Jaguar Land Rover on commitments for future models to be made here in the UK.”

Unite's assistant general secretary for legal services and acting regional secretary for the West Midlands Howard Beckett added: “Jaguar Land Rover is a powerhouse of the West Midlands economy and a source of decent well paid jobs. News of lay-offs will obviously be unsettling for workers and their families and send shockwaves through the supply chain.

“Our fear is that the jobs toll in the wider economy could reach 5,000. Losses on this scale demand concerted government action, nationally and in the region.”

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Recent figures have shown JLR sales on the slide faster than the rest of the UK's car makers, largely due to falls in the UK and Europe.

But in its statement yesterday the company said it was continuing to recruit large numbers of engineers, graduates and apprentices as it invests in new products and technologies.

"We also remain committed to our UK plants in which we have invested more than £4bn since 2010 to future proof manufacturing technologies to deliver new models."